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News > Technology
Blockbuster going after NetFlix
Video rental retailer will let customers get DVDs by mail with no late charges, using NetFlix model.
August 11, 2004: 10:04 AM EDT

NEW YORK (CNN/Money) - Video rental chain Blockbuster Inc. is set to begin offering customers DVD's delivered to their home by mail, using the business model pioneered by NetFlix Inc.

Blockbuster Incorporated

The Blockbuster Online offering will let subscribers get unlimited DVD movie rentals by mail, with up to three out at a time and no return dates or late charges. It will charge a monthly fee of $19.99, slightly less than the $22 monthly price NetFlix is offering new customers. The Blockbuster offer also includes two free in-store movie rental coupons per month.

Blockbuster has offered a similar unlimited rental, no late-charge program it called Movie Pass but it required customers to pickup and return the DVDs to the stores rather than get them by mail.

NetFlix (NFLX: Research, Estimates) has seen its success in the home-delivery DVD rental market spur other established retailers to offer the same type of product.

Wal-Mart Stores (WMT: Research, Estimates) also has a lower-cost unlimited offering, letting customers pay only $15.54 a month for up to two DVDs at a time or $18.76 a month for the three DVDs that NetFlix and Blockbuster offer.

An earlier version was misleading in characterizing the type of films rented by NetFlix.

Neither Blockbuster nor Wal-Mart will rent films with NC-17 ratings, which NetFlix does offer.

Blockbuster (BBI: Research, Estimates) is the world's largest video and DVD rental retailer, with nearly 9,000 stores. Media conglomerate Viacom (VIA: Research, Estimates) is in the process of selling off its 81 percent stake in the retailer.  Top of page

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